Qingdao Port, China's third largest, will build a $60 million oil offloading wharf with Asia's largest oil refiner, Sinopec Group, along with a container dock with earlier partners, a senior executive said. The new oil wharf will have a capacity of 300,000 tonnes a year, cost 500 million yuan ($60 million) and be ready within 18 months, Qingdao Port (Group) Chairman Chang Dechuan told Reuters in an interview on the weekend.
Fuelled by surging exports and rising domestic consumption of raw materials in an economy that grew 9.5 percent last year, China's ports are enjoying double-digit traffic growth. The country is furiously building new facilities to meet demand.
Qingdao is in Shandong, a province in China's north.
In 2004 Qingdao Port opened a joint venture cargo wharf with A. P. Moeller-Maersk terminals unit APM Terminals, P&O's P&O Ports and Cosco Pacific Ltd, the Hong Kong-listed arm of China's largest shipping group.
That venture posted a profit of 1.26 billion yuan in 2004 and was on track for double-digit growth this year, with the number of containers handled expected to rise 37 percent to 5.5 million TEUs (twenty-foot equivalent units), Chang said.
The same three partners would participate in the new container wharf.
"China's strong economic growth has pushed the port's development and meant the joint venture had an especially good first year of operations," Chang said at a hotel in Beijing, where he was attending the annual meeting of parliament.
The new wharf will have seven berths and an annual handling capacity of more than 7 million TEUs, he said, declining to give an investment figure.
"The joint venture is very efficient, and many shipping companies have switched over to using us from other ports in the region," Chang said.
But he said Qingdao Port had no listing plans, despite media reports it was considering an offering to help pay for expansion.
"We are already so attractive to foreign investors, the last thing we lack is capital," the towering executive said. But Qingdao Port were talking with more potential foreign investors, he added, without giving names. Though the central government has been reining in credit to cool an economy in danger of overheating, Chang said the port had not been affected.
"Our main problem is that demand is far exceeding capacity," he said. "Our most pressing concern is how to raise capacity.
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